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Tucson losing 300 jobs in Texas Instrument consolidation

The clean room at Texas Instruments.

The clean room at Texas Instruments.

Tucson is slated to lose more jobs at Texas Instruments Inc.

The company on Monday announced it will consolidate its manufacturing operations in Texas, eliminating about 300 jobs here. That’s about half the total workforce in Tucson.

However, Tucson will retain about 300 higher wage engineering and development jobs at the electronics plant near the airport.

Over the next two years, TI will consolidate its Tucson manufacturing operations into its Sherman, Texas, facility. The Sherman, Texas facility has more room for manufacturing today and room for expansion, said Gail Chander, company spokeswoman. It costs less to manufacture there because of reduced overhead costs, she said.

The TI Tucson site, 6730 S. Tucson Blvd., will remain a long-term product design center and will continue to employ about 300 people, including engineers, the company said.

“There a possibility that the process development operations here could grow as we grow our Analog chip business,” Chandler wrote in an e-mail.

Tucson Regional Economic Opportunities also viewed the remaining jobs as positive news: “It shows Tucson still offers the company institutional knowledge. And keeping higher skilled, higher wage jobs is part of our economic blueprint,” said Laura Shaw, senior vice president of corporate and community affairs.

Production here is expected to stop by the end of 2009. About 200 of the jobs will be transferred to Texas.

The first layoffs will occur in th middle of next year, the company said, but most won’t be laid off until mid-2009. Layoffs will include separation pay, extended insurance benefits and job-search assistance. TI will offer outplacement consultants to counsel employees and assist them in locating new jobs.

The consolidation should be seamless to customers, the company said.

TI will continue the TI Foundation, which will maintain its commitments to the United Way of Tucson at current levels through 2008 and remain a supporter at a significant level in 2009 and beyond.

TI will incur total restructuring charges of about $35 million, distributed across the consolidation period. TI expects to achieve annual savings of about $20 million when completed.

Texas Instruments bought Tucson-based Burr-Brown Corp. in August 2000, in a deal valued at $7.6 billion, the highest price ever paid for an Arizona company.

Peak employment here was about 1,300 before the sale of Burr-Brown.

Tom Brown was one of Tucson’s most successful businessmen. He attended MIT and Harvard, where he earned a general engineering degree and an MBA, respectively. After serving in the Navy in World War II, he moved to Tucson, where in 1956 he co-founded Burr-Brown Research Corp. with fellow engineer Page Burr. Three years later he bought out his partner and continued building the company.

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